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PETITIONER: CHINNAMA GEORGE & ORS.

       Vs.

RESPONDENT: N.K.  RAJU & ANR.

DATE OF JUDGMENT:       06/04/2000

BENCH: D.P.Wadhwa, D.P.Mohapatro

JUDGMENT:

     D.P.  WADHWA,J.

     Appellants  are widow and minor children of George who died  in a motor vehicle accident which occurred on May  28, 1989.   George  was riding a scooter.  It was hit by  a  bus driven  by  Mohanan,  the  third respondent in  a  rash  and negligent  manner.   Bus was owned by N.K.  Raju, the  first Respondent.   The  insurer  was the Oriental  Insurance  Co. Ltd.,  the  second respondent.  Appellants are aggrieved  by the  judgment dated January 6, 1998 of the Division bench of the  High  Court  of  Kerala which  reduced  the  amount  of compensation  arising out of the accident from Rs.3,78,000/- awarded  by  the Motor Accident Claims Tribunal (for  short, the  ’Claims  Tribunal’)  to   Rs.2,27,320/-.   George,  the deceased  was  36 years of age at the time of the  accident. His  income was Rs.2,000/- per month.  He was an  actor-cum- secretary  of a leading drama troupe which was staging drama in India and abroad.  After deducting his personal expenses, his  income  was  determined at Rs.1600/- per month  by  the Claims  Tribunal.   Applying multiplier of 20,  compensation amount  was  fixed at Rs.3,78,000/- by the Claims  Tribunal. The  Claims  Tribunal  gave  an award  dated  10.1.1991  for Rs.3,78,000/-  with interest @ 12% per annum from  September 1,  1989  with cost.  The owner of the Bus, N.K.  Raju,  and the  Insurer  filed appeal against the order of  the  Claims Tribunal  under Section 173 of the Motor Vehicles Act,  1988 (for  short,  the ’Act’).  Section 173 entitles  any  person aggrieved  by  an award of the Claims Tribunal to prefer  an appeal  to  the High Court.  In view of the decision of  the Claims  Tribunal, it could not be said that N.K.  Raju,  the owner  could  be  an aggrieved person for him  to  file  any appeal against the award.  We have gone through the impugned judgment  of  the High Court.  There is no mention in  whole body of the judgment as to how N.K.  Raju felt aggrieved and what  was  his argument raised against the award  of  Claims Tribunal.  There is no challenge to the finding that the bus was  being  driven  by  the third  respondent  in  rash  and negligent  manner.  Under Section 149 of the Act, it is  the duty  of the insurer to satisfy the award against the person insured  in  respect of third party risks.  It is  not  that liability  of  the  insurer  in the present  case  is  being disputed.   Insurer  can defend the proceedings  before  the Claims  Tribunal  on certain limited grounds.   Sub-sections (1),  (2)  and (7) of Section 149 of the Act  are  relevant,

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which  are  as under :  "149.  Duty of insurers  to  satisfy judgments  and awards against persons insured in respect  of third  party risks.-(1) If, after a certificate of insurance has  been  issued  under sub-section (3) of section  147  in favour  of  the person by whom a policy has  been  effected, judgment  or  award in respect of any such liability  as  is required  to  be  covered by a policy under  clause  (b)  of sub-section (1) of section 147 (being a liability covered by the  terms of the policy) or under the provisions of section 163A  is obtained against any person insured by the  policy, then,  notwithstanding  that the insurer may be entitled  to avoid or cancel or may have avoided or cancelled the policy, the  insurer  shall,  subject  to  the  provisions  of  this section,  pay  to the person entitled to the benefit of  the decree  any  sum  not  exceeding  the  sum  assured  payable thereunder, as if he were the judgment debtor, in respect of the  liability, together with any amount payable in  respect of  costs and any sum payable in respect of interest on that sum  by  virtue  of any enactment relating  to  interest  on judgment.   (2) No sum shall be payable by an insurer  under sub- section (1) in respect of any judgment or award unless, before  the  commencement  of the proceedings in  which  the judgment  or  award is given the insurer had notice  through the Court or, as the case may be, the Claims Tribunal of the bringing  of the proceedings, or in respect of such judgment or  award so long as execution is stayed thereon pending  an appeal, and an insurer to whom notice of the bringing of any such  proceedings is so given shall be entitled to be made a party  thereto  and  to  defend the action  on  any  of  the following grounds, namely:- (a) that there has been a breach of  a  specified condition of the policy, being one  of  the following conditions, namely:- (i) a condition excluding the use  of  the  vehicle  (a) for hire or  reward,  where  the vehicle  is  on  the  date of the contract  of  insurance  a vehicle  not covered by a permit to ply for hire or  reward, or  (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used,  where  the  vehicle is a transport  vehicle,  or  (d) without side-car being attached where the vehicle is a motor cycle;   or  (ii) a condition excluding driving by  a  named person or persons or by any person who is not duly licenced, or  by  any person who has been disqualified for holding  or obtaining   a   driving  licence   during  the   period   of disqualification;   or (iii) a condition excluding liability for  injury  caused or contributed to by conditions of  war, civil  war, riot or civil commotion;  or (b) that the policy is  void  on  the  ground  that   it  was  obtained  by  the non-disclosure  of a material fact or by a representation of fact  which  was false in some material particular.  (3)  to (6)  ...........  (7) No insurer to whom the notice referred to  in  sub- section (2) or sub-section (3) has  been  given shall  be  entitled  to avoid his liability  to  any  person entitled  to the benefit of any such judgment or award as is referred  to  in sub-section (1) or in such judgment  as  is referred  to in sub-section (3) otherwise than in the manner provided  for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be."

     Admittedly,   none   of  the   grounds  as  given   in sub-section  (2)  of  Section 149 exist for the  insurer  to defend the claims petition.  That being so, no right existed in  the  insurer  to file appeal against the  award  of  the Claims  Tribunal.  However, by adding N.K.  Raju, the  owner as  co-  appellant,  an appeal was filed in the  High  Court which  led to the impugned judgment.  None of the grounds on

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which  insurer  could  defend the claims  petition  was  the subject  matter  of  the  appeal as far as  the  insurer  is concerned.   We have already noticed above that we have  not been able to figure out from the impugned judgment as to how the  owner  felt  aggrieved  by  the  award  of  the  Claims Tribunal.   The  impugned  judgment  does  not  reflect  any grievance  of  the owner or even that of the driver  of  the offending bus against the award of the Claims Tribunal.  The insurer by associating the owner or the driver in the appeal when  the  owner  or the driver is not an  aggrieved  person cannot  be  allowed  to mock at the law which  prohibit  the insurer from filing any appeal except on the limited grounds on which it could defend the claims petition.  We cannot put our  stamp  of approval as to the validity of the appeal  by the insurer merely by associating the insured.  Provision of law  cannot  be  undermined in this way.  We  have  to  give effect  to the real purpose to the provision of law relating to  the  award  of compensation in respect of  the  accident arising  out  of  the use of the motor vehicles  and  cannot permit  the insurer to give him right to defend or appeal on grounds  not  permitted  by law by a backdoor  method.   Any other  interpretation  will produce unjust results and  open gates  for  the insurer to challenge any award.  We have  to adopt  purposive  approach which would not defeat the  broad purpose of the Act.  Court has to give effect to true object of  the  Act by adopting purposive approach.  Sections  146, 147,  149 and 173 are in the scheme of the Act and when read together  mean :  (1) it is legally obligatory to insure the motor   vehicle  against  third   party  risk.   Driving  an uninsured   vehicle  is  an   offence  punishable  with   an imprisonment  extending up to three months or the fine which may  extend to Rs.1,000/- or both;  (2) Policy of  insurance must  comply  with the requirements as contained in  Section 147  of  the Act;  (3) It is obligatory for the  insurer  to satisfy  the judgments and awards against the person insured in respect of third party risks.  These are sub-sections (1) and  (7) of Section 149.  Grounds on which insurer can avoid his  liability are given in sub-section (2) of Section  149. If none of the conditions as contained in sub-section (2) of Section  149  exist for the insurer to avoid the  policy  of insurance  he  is  legally bound to satisfy the  award.   He cannot  be  a person aggrieved by the award.  In  that  case insurer  will  be barred from filing any appeal against  the award  of the Claims Tribunal.  The question that arises for consideration  is  :  can the insurer join the owner or  the driver  in filing the appeal against the award of the Claims Tribunal as driver or owner would be the person aggrieved as held  by this Court in Narendra Kumar & Anr.  vs.  Yarenissa & Ors.  [(1998) 9 SCC 202]?  This Court has held that appeal would  be maintainable by the driver or the owner and not by the  insurer  and, thus, a joint appeal when filed could  be maintainable  by  the driver or the owner.  This is how  the Court  held:  - "For the reasons stated above, we are of the opinion  that even in the case of a joint appeal by  insurer and  owner  of offending vehicle if an award has  been  made against  the tortfeasors as well as the insurer even  though an  appeal filed by the insurer is not competent, it may not be  dismissed as such.  The tortfeasor can proceed with  the appeal after the cause-title is suitably amended by deleting the name of the insurer."

     There  is  no dispute with the proposition so laid  by this  Court.  But the insurer cannot maintain a joint appeal along  with the owner or the driver if defence on any ground under  Section  149(2)  is  not available to  it.   In  that

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situation  joint  appeal  will be incompetent.   It  is  not enough  if  the insurer is struck out from the array of  the appellants.  The appellate court must also be satisfied that a  defence  which  is permitted to be taken by  the  insurer under  the  Act was taken in the pleadings and  was  pressed before  the  Tribunal.   On  the appellate  court  being  so satisfied  the appeal may be entertained for examination  of the correctness or otherwise of the judgment of the Tribunal on  the question arising from/relating to such defence taken by  the  insurer.  If the appellate court is  not  satisfied that  any  such  question was raised by the insurer  in  the pleadings and/or was pressed before the Tribunal, the appeal filed   by   the  insurer  has  to  be  dismissed   as   not maintainable.   The court should take care to ascertain this position  on proper consideration so that the statutory  bar against the insurer in a proceeding of claim of compensation is  not  rendered  irrelevant  by   the  subterfuge  of  the insurance  company joining the insured as a co- appellant in the  appeal  filed  by  it.  This position  is  clear  on  a harmonious  reading of the statutory provisions in  Sections 147,  149 and 173 of the Act.  Any other interpretation will defeat  the  provision of sub-section (2) of Section 149  of the  Act and throw the legal representatives of the deceased or  the  injured  in the accident to  unnecessary  prolonged litigation at the instance of the insurer.

     In  the  present  case  we do not  find  any  argument addressed  on  behalf of the owner of the offending  vehicle and  the  only argument, which the High Court  noticed,  was that  of the counsel for the insurer.  That argument was  on the quantum of compensation granted to the appellants.  That ground  is  certainly not available to the insurer  for  the purpose  of filing the appeal.  We, therefore, hold that the present  appeal by the insurer by joining the owner was  not competent,  as there was no ground available to the  insurer to defend the claim petition.

     We,  therefore, set aside the impugned judgment of the High  Court  and  restore  that   of  the  Claims  Tribunal. Appellants  shall  be entitled to cost which we quantify  at Rs.10,000/-.

     Accordingly, the appeal is allowed.